Echo: Amazon’s Next Billion Dollar Baby?

“A bit more than a year after its release, Amazon’s Echo has morphed from a gimmicky experiment into a device that brims with profound possibility,” writes Farhad Manjoo in The New York Times. “Here is a small, stationary machine that you set somewhere in your house, which you address as Alexa, which performs a variety of tasks — playing music, reading the news and weather, keeping a shopping list — that you can already do on your phone.”

“But the Echo has a way of sneaking into your routines. When Alexa reorders popcorn for you, or calls an Uber car for you, when your children start asking Alexa to add Popsicles to the grocery list, you start to want pretty much everything else in life to be Alexa-enabled, too. In this way, Amazon has found a surreptitious way to bypass Apple and Google — the reigning monarchs in the smartphone world — with a gadget that has the potential to become a dominant force in the most intimate of environments: our homes.”

“Many in the industry have long looked to the smartphone as the remote control for your world. But the phone has limitations. A lot of times fiddling with a screen is just too much work. By perfecting an interface that is much better suited to home use — the determined yell! — Amazon seems on the verge of building something like Iron Man’s Jarvis, the artificial-intelligence brain at the center of all your household activities.”

“Scot Wingo, the chairman of ChannelAdvisor, an e-commerce consulting firm, said the early signs suggested that the Echo was on a path to become Amazon’s next $1 billion business.”

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Burger King Re-Discovers its Inner Whopper

The Wall Street Journal: “Following unsuccessful efforts to appeal to a broader, more health-conscious customer base with salads, snack wraps, smoothies and low-calorie french fries, Burger King has returned to its roots as a purveyor of inexpensive burgers, fries and, now, hot dogs.”

“The bloated menu complicated kitchen operations and failed to attract customers as hoped. In 2010, Burger King launched more than 30 limited-time offers and 20 permanent menu items. By comparison, it launched 20 limited-time offers last year and no permanent menu items.” Burger King President Alex Macedo: “In a moment when a lot of brands in quick service are trying to become more fast-casual, we’re taking an opposite view.”

“David Harper, a franchisee who operates 72 Burger Kings in several states, said the chain has learned not to repeat its biggest mistake: copying rivals. ‘We know who we are now,’ he said … The changes are showing results. Burger King’s adjusted earnings before interest, taxes, depreciation and amortization grew 68% between 2010 and 2015 … Same-store sales at U.S. and Canadian restaurants grew 5.7% last year, better than most big rivals.”

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For Whom The Cash Registers

“High-end stores hide registers to force contact with salespeople, eliminate lines and add fancy sheen,” The Wall Street Journal reports. “Stores aim to make the experience of paying more elegant, akin to private shopping, and to eliminate a pain point that keeps some shoppers from completing a purchase—having to wait in a visible line. Hiding the cash register also forces shoppers to interact with the salespeople and might even encourage them to buy more.”

Dexter Peart of luxury label Want Les Essentiels: “We’re downplaying that last transactional part of the experience. … We want the human interaction as one of the last touch points … This time also gives our sales associates an opportunity to get to know the people shopping in our stores a lot better.”

“Stores say customers’ expectations have risen with the success and ease of online shopping, making waiting in line seem unenlightened … But making cash registers discreet and encouraging customers to work through sales associates instead could make some shoppers uncomfortable. The unfamiliar protocol may feel strange at first.” Barneys maintains “a few visible cash registers in the downtown store in case a customer feels more comfortable paying the traditional way.”

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Excavating Problems at Anthropologie

The Washington Post: It’s hard not to see the parallels between what’s ailing J. Crew and what’s ailing Anthropologie: Both chains are simply failing to offer shoppers the kind of clothes they are looking for. And while it was easy at first to write off Anthropologie’s stumbles as a temporary blip, a full year of unattractive merchandise in dresses — one of the chain’s most essential categories — raises questions about whether it might be slipping into a rut.”

“It’s not all bad news for Anthropologie: The company said that sales of home products, beauty products, accessories and shoes were strong in the latest quarter.” CEO Richard Hayne “told investors he is so bullish Anthropologie’s potential as a home goods retailer that he said he could foresee a future in which clothing accounts for less than 50 percent of the store’s sales. If the store can pull off that change in the mix of the business, it may not matter so much if the apparel category goes through a soft patch.”

“And the retailer seemed to suggest that it is going to be more focused on building an international growth strategy this year, a move that could provide it with a fresh stream of sales growth.”

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Beds-in-a-Box: The Big Mattress

The Wall Street Journal: “Mattresses were long considered immune to the e-commerce boom. For decades, they have been sold in showrooms full of dozens of styles with dizzying discounts and high-pressure salespeople. But a new breed of upstarts with slick websites has cracked into the $14 billion U.S. mattress industry. The online sellers offer just a few varieties at fixed prices—and ship free to customers’ doors a foam mattress that is compressed into a box the size of a large suitcase.”

“In place of the chance to try out a $5,000 Tempur-Pedic with adjustable base or lie down on a $2,500 Serta iComfort with gel memory foam, they promise free shipping, 100-day guarantees and free returns. It is a process aimed at the often wealthier, younger and busy shoppers who care less about kicking the tires and more about convenience … Compressed mattresses promise high margins because they are cheaper to ship than inner spring mattresses that can’t be compressed … Because of how carriers like FedEx and UPS charge, delivering a 90-pound compressed mattress is less expensive than home delivery with a regular truck.”

“Returns, however, are a challenge.” As Scott Thompson, CEO of Tempur Sealy, explains: “Getting the bed back in the box, that’s a little bit of a problem.” Other online mattress sellers include Casper Sleep, Leesa Sleep and Yogabed.

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UK Record Shops Enjoy Record High

“The number of ‘bricks and mortar’ entertainment stores has reached a record high – despite rising online sales of music and film,” the BBC reports. There are now some 14,800 shops selling CDs, DVDs and Blu-ray, with supermarkets and high-street chain sales leading to the rise … The number of stores selling music and video has more than doubled since 2009, with DVD and Blu-ray available in 14,852 stores in 2015 and CDs and vinyl in 14,727.

Kim Bayley, CEO of the Entertainment Retailers Association: “Conventional wisdom has always suggested that the internet spelled the end for physical entertainment stores, but these numbers show that traditional retail still has a place, particularly for impulse purchases and gifts. After all, you can’t gift-wrap a download or a stream.”

Bayley adds that “the trend is clear – just as the internet has demonstrated that accessibility and convenience are key to selling entertainment, physical stores are demonstrating that if you put entertainment in front of people, they will buy it.”

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A Revolution in Toothbrush Design

Gizmodo: “Researchers at the Fraunhofer Institute have developed a virtual brushing simulator that promises to revolutionize how toothbrushes are designed and tested … The size, shape, and elasticity of a toothbrush’s bristles can be precisely modified and tested in the simulator, but so can the size, shape, and quantity of the abrasive particles in a toothpaste.”

“Highly controlled experiments can be conducted in the simulator allowing toothbrush designers to almost instantly determine how effective a new bristle design is at removing dirt while still preserving tooth enamel … So in the future when a commercial for a new toothbrush promises it to be effective at battling plaque and gingivitis, hopefully its creators will be able to show the simulated results backing up their claims before you make the upgrade.”

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Michael Schrage: Why UX SUX

User experiences fall short when they are inordinately focused on transactions, says Michael Schrage of MIT and author, most recently, of The Innovator’s Hypotheses. In a talk entitled, Why UX SUX, at Columbia University’s Brite ’16 conference, Schrage said the emphasis should be on how interactions with the brand measurably transform customer perceptions and expectations.

The question, then, is which transformations are best for both customers and brands? The challenge, in that sense, is to re-design customers for the trajectory of their sense of themselves and who they want to be. Schrage cited Chik-fil-A and its offer of a free dessert to families who put away their cell phones during dinnertime, and Lego, with its focus not so much on its plastic bricks but rather the future of play itself. He also mentioned Netflix’s re-inventing its customers as binge viewers.

Tracking trajectories and transforming expectations requires integrating innovation with the experience and expectations, Schrage says. Achieving this is less about having a strategy than it is a culture that’s open to transcending the transactional experience, and transforming experiences in tandem with the customer trajectory.

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Daniel Lubestsky: Cool to be Kind

Speaking at Brite ’16, Daniel Lubetsky, founder of Kind, says that 90 percent or more of those who buy the snack bars are unaware of its social mission, which, naturally, is to promote kindness. The priority is that they buy into the brand as a quality product. That said, a community of kindness is promoted in at least three ways:

1) Kindawesome Cards. When someone is kind to you, visit howkindofyou.com and have a kindawsome card, good for two Kind bars, sent to him or her. It’s on the honor system. 2) Kind Causes. A website where you can nominate causes. Each month the “community” votes for a favorite, which gets $10,000. 3) Kind Foundation. A celebration of “kind” people who are making a difference in their communities, with a total of one million dollars in awards.

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